Key figures of subgroup Lufthansa Cargo: Contact and Networking the world. Lufthansa Cargo AG. Our product family. imprint. Annual report 2015. Revenue and result 2015 2014 Customer contact: Publisher: Lufthansa Cargo AG Lufthansa Cargo AG Total revenue in €m 2,354.9 2,435.3 Call service Germany: Frankfurt Airport, Gate 21 Operating result in €m 35.0 100.3 Phone: +49 18 06-747100 Building 322, FRA F/CI Fax service Germany: 60546 Frankfurt/Main EBIT in €m 3.0 122.8 Fax: +49 18 027-47747 Adjusted EBIT in €m 73.5 122.9 The worldwide way. The fastest way. Email: [email protected] Editors: td.Pro – our product for td.Flash – our express product for lufthansa-cargo.com Michael Göntgens (Dir.) EBT in €m – 13.2 110.5 standard freight. urgent shipments. Katharina Krappmann Press contact: Key balance sheet and cash flow statement figures Michael Göntgens Concept/Realisation: Capital expenditure in €m 116.2 213.9 The shortest way. Your answer in an emergency. Director Communications MPM Corporate Communication

Total shareholders’ equity and liabilities in €m 1,567.9 1,465.0 Courier.Solutions – Emergency.Solutions – Lufthansa Cargo AG Solutions, Mainz our express solution for personally our express solution that does Phone: +49 69 696-95447 Cash flow from operating activities in €m 198.5 138.3 supervised transit. the impossible. Fax: +49 69 696-91185 Photography: Equity ratio in % 54.6 12.1 Email: [email protected] Patrick Kuschfeld The earliest way. The most responsible way. Jürgen Mai Key profitability and value creation figures Airmail – our special product for Care/td – our special product Andreas Stundebeek things that can not wait. for dangerous goods. Operating margin in % 1.5 4.1 Print production: EBIT margin in % 0.1 5.0 W. B. Druckerei GmbH, The most convenient way. The most consistent way. Hochheim am Main Adjusted EBIT margin in % 3.1 5.0 cd.Solutions – our special product for Cool/td – our special product for direct deliveries. ­temperature sensitive shipments. Employees and performance figures

Average number of employees 4,643 4,656 More information about You can also find this annual report on theinternet ­ The freshest way. The live way. Lufthansa Cargo: Employees as of 31 December 4,607 4,663 at lufthansa-cargo.com/2015. Fresh/td – our special product Live/td – our special product lufthansa-cargo.com Freight and mail in thousand t 1,630 1,669 for perishables. for animals. Disclaimer in respect of forward-looking statements Available freight tonne-kilometres (TKO) in millions 12,606 12,354 Information published in the 2015 annual report with regard to the future development of Lufthansa Cargo consists purely of ­fore­casts and assessments and not of definitive historical facts. Its purpose is exclusively informational and is identified by the use Revenue freight tonne-kilometres (TKT) in millions 8,364 8,612 of such cautionary terms as “believe”, “expect”, “forecast”, “intend”, “project”, “plan”, “estimate” or “endeavour”. These forward- The safest way. The best-protected way. looking statements are based on all discernible information, facts and expectations available at the time. They can, there­fore, only claim validity up to the date of their publication. Since forward-looking statements are by their nature subject to uncertainties and Cargo load factor in % 66.3 69.7 Safe/td1 – our special product Safe/td2 – our special product imponderable risk factors – such as changes in underlying economic conditions – and rest on assumptions that may not or may ­divergently occur, it is possible that the company’s actual results and development may differ materially from those implied by the for valuable shipments. for highly desirable shipments. forecasts. Lufthansa Cargo makes a point of checking and updating the information it publishes. It cannot, however, assume any obligation to adapt forward-looking statements to accommodate events or developments that may occur at a later date. Accord- ingly, it neither expressly nor conclusively accepts liability, nor gives any guarantee, for the actuality, accuracy and completeness of this data and information.

Dieser Jahresbericht liegt auch in deutscher Sprache vor. Editorial deadline 28.02.2016 There may be differences due to rounding. This annual report is also available in German.

Dear reader, Annual review. Sustainability.

This last year demanded everything of Lufthansa Cargo. Demand saw a noticeable downturn after a flying start to the We also expanded our partnerships with other airlines. Our partnership with Japanese airline ANA got off to an ex­ year and an outstanding first quarter. European cargo airlines weren’t the only ones to have their lives made difficult by cellent start. The joint venture started with the joint marketing of freight capacities from Japan, and flights from Europe Q1 Q3 Lufthansa Cargo has overcapacities in global airfreight markets and a strong US dollar. Lufthansa was also affected by a number of strikes to Japan were added in summer 2015. We also added a second partner at the end of the year. We plan to work around 4,600 employees worldwide last year. Lufthansa Cargo was still able to carry out all of its freighter flights despite the strike action, but the labour ­together with United Cargo on transatlantic routes. This will be done with a focus on the customer, who will benefit JAN One of Lufthansa Cargo’s MD-11F freighters, re­ JUL Lufthansa Cargo celebrates the firstanniversary of eAWB. disputes led to a significant decline in bookings. from a wider network, more choice and process efficiencies. gistration number D-ALCS, makes its penultimate The Perishable Centre in Frankfurt celebrates 20 years. ­cargo flight before flying on to Victorville in California. Our adjusted EBIT of EUR 73.5m was lower than expected. We consistently implemented a number of measures last With the global roll-out of a new IT platform for freight handling, the biggest software project in the Company’s history A unique Cool/td charter flight ferries meningitis vacci- AUG Lufthansa Cargo’s ePortal goes online. Information Lufthansa Cargo has been year to get our performance back to a level where we are able to make long-term investments. These measures are was brought to a successful conclusion at the end of 2015. The MOSAIK legacy system was deactivated once and for using five Triple Sevens ­since nes directly from Rome to Belo Horizonte. and services are now even easier for customers to access February 2015, cutting noise­ based on three pillars: all in December. The new IT platform is based on an industry solution and took over from MOSAIK without any issues. online. The joint venture with ANA Cargo launches Japan­- 5 and fuel emissions thanks to We also made good progress with the digitalisation of all our main business processes in our eCargo programme. The FEB Lufthansa Cargo welcomes its fifth 777F to the bound routes from Europe. Lufthansa Flight Training in Triple their cutting edge engines Sevens 1. Reviewing the project portfolio and reducing external project expense launch of our new website and smartphone apps were some of the events that reflected the advances we have made fleet in Frankfurt. Frankfurt starts using its brand new Triple Seven Simula- 2. Retirement of two MD-11F aircraft in order to significantly improve the load factor of our freighters in this area. It is now even easier and quicker for our customers to access information and services. tor. 450 sports enthusiasts set off on the first office city run 3. Launching the C40 cost-cutting programme, which will sustainably reduce our annual HR expenses and costs of MAR Chairman of the Executive Board and CEO Peter on behalf of aid project Cargo Human Care e.V. service providers by EUR 40m from 2018 onwards Finding the right price structure was a major issue for practically everyone in the aviation sector last year. Unlike some Gerber and Board Member Finance Dr Martin Schmitt of its competitors, Lufthansa Cargo and Swiss World Cargo decided not to introduce any all-in rates. Instead, we announce that Lufthansa Cargo made an operating pro- SEP The new PilotsEYE film “A plane’s birth coming down 150 4.600 These measures will help us to continue investing in new infrastructure, aircraft and services for our customers and ­decided to combine all of our surcharges into a single airfreight surcharge which is much cheaper than the previous fit of EUR 100m in 2014. to earth” comes out on DVD and Blu-ray, starring D-ALFE, logistics Mitarbeiter 4.6004,600 experts employeesMitarbeiter ­remain at the forefront of our industry. We reached some important milestones last year on our journey towards the system. This new surcharge has been in place since autumn 2015. This structure provides more transparency for Lufthansa Cargo’s newest Boeing 777F. The German future. ­Lufthansa Cargo’s customers and speeds up the process of preparing quotes. The surcharge also allows us to factor Red Cross and Lufthansa Cargo fly more than 15,000 in the volatility of external cost factors which we have no control over such as fuel, exchange rates and airport fees. field beds for refugees from North America to Germany. The five Boeing 777 freighters which we ordered have been fully integrated into our fleet since February 2015. ­These from the worlds of business and science modern cargo aircraft are renowned for their excellent reliability, low unit costs and low fuel consumption. A commitment to the environment and society is one of Lufthansa Cargo’s core values, and was on display once again ­discuss environmental strategies in 2015. We met with around 150 representatives from the worlds of logistics, politics and science to discuss ways in Q2 Q4 for the aviation sector at Lufthansa Cargo’s which we could significantly reduce the impact that our business has on the environment at our environmental confe- fourth environmental conference rence in Frankfurt, which has already become something of a fixture. APR The Lufthansa Cargo Supervisory Board appoints OCT Lufthansa Cargo launches C40, a new cost-cutting Martin Schmitt as Board Member Finance and Human programme. Lufthansa Cargo and Swiss World Cargo Lufthansa Cargo really showed its colours in November. One of our MD-11F aircraft is now flying around the world with Resources for a further five years. Lufthansa delays its make changes to their price system for the winter flight time- 24 colourful children’s footprints on its fuselage as a flying ambassador for the aid organisation Cargo Human Care. planned capital expenditure towards the new freight cen- table. The winter timetable also sees Lufthansa Cargo 15,000 field beds tre LCCneo by at least two years. All of the freight hand- ­making regular flights to Ho-Chi-Minh City in Vietnam for 4.60024 Mitarbeiterfootprints As you can see, 2015 was an eventful year and we are firmly convinced that 2016 will also demand a lot of us. How­ ling at the Frankfurt hub now uses the airline’s new IT the first time. ever, we are well equipped for the year ahead. We have a clear strategy, an outstanding product and a first-class team. platform. Lufthansa Cargo is voted best European cargo Thank you for supporting us on this journey. airline at the Cargo Airline of the Year Awards. NOV Work began on expanding the cargo hub in Frank- Charlie Hotel acts as a flying furt 20 years ago. A Lufthansa Cargo freighter starts flying The German Red Cross ­ambassador for Cargo Human Care, Kind regards, MAY An earthquake rocks Nepal: Lufthansa Cargo around the world with 24 children’s footprints on its and Lufthansa Cargo decked out with 24 footprints added makes a relief flight to Kathmandu for UNICEF at cost ­fuselage as a flying ambassador for the aid organisa­ fly 15,000 field beds in November­ 2015 from children in the care of the humanitarian aid project price. Lufthansa Cargo has a prominent role at the 15th tion Cargo­ Human Care. for ­refugees from North ­America to Germany transport logistic trade fair in Munich, the world’s lea- ding logistics trade fair. DEC After a successful first year working in partner­ ship with ANA, Lufthansa Cargo turns towards the USA JUN Lufthansa Cargo launches its new “Customized and extends its collaboration with United Cargo. After Law for Gender Quota Import” service for customers. The Brazilian city of 34 years of service, the freight handling system MOSAIK The supervisory board determined a target proportion of 30% women on the supervisory board of Lufthansa Cargo AG to be achieved by December 31st, 2016. The supervisory board determined a target proportion of Peter Gerber Dr Alexis Dr Karl-Rudolf Dr Martin Schmitt ­Natal is added to the freighter route network along with is finally retired and completely replaced by a cutting 0 % women on the executive board of Lufthansa Cargo AG to be achieved by December 31st, 2016. Aşgabat, the capital of Turkmenistan. Lufthansa Cargo edge IT platform. von Hoensbroech Rupprecht The executive board determined a target proportion of 16,7% women on the first management level below the Chairman of the Board Member Board Member Board Member Finance holds its fourth environmental conference at Frankfurt’s executive board and a target proportion of 18,6% women on the second management level below the executive From left:. Dr Alexis von Hoensbroech, Dr Karl-Rudolf Rupprecht, Peter Gerber, Dr Martin Schmitt Executive Board and CEO Product and Sales Operations and Human Resources Städel Museum. board, both to be achieved by December 31st, 2016.

Operating performance. Revenue and earnings development. Outlook.

Cargo tonnage at Lufthansa Cargo was down year on Capacity was expanded by 1.6 per cent in the Asia/­ Impairment losses were the main reason for the Logi- Total income sank by 4.2 per cent to EUR 2,413.0m. freight terminal (LCCneo) and on planning costs for the Lufthansa Cargo is expecting revenue to be slightly The airline will continue to systematically implement its year by 2.4 per cent. Available tonne-kilometres in- Pacific traffic region, but cargo tonne-kilometres stics segment’s reduced EBIT of EUR 3.0m in the 2015 construction of an administration centre. below, and Adjusted EBIT to be slightly above, the Lufthansa Cargo 2020 programme in 2016. Expanding creased by 2.0 per cent, of which 3.1 per cent was in declined by 2.3 per cent. The load factor shrank by financial year (previous year: EUR 122.8m). When adjus- Operating expenses increased by 0.8 per cent compa- previous year in 2016. The market environment will airline partnerships and making progress with the digi­ belly capacities of passenger aircraft and 1.1 per cent 3.0 percentage points. ted for impairment losses, adjusted EBIT came to EUR red with the previous year to EUR 2,435.3m. Other operating expenses rose year on year by 6.6 per remain challenging, and the uncertainty of develop- talisation of business processes are just some of the was in freighters. Cargo tonne-kilometres fell by 2.9 73.5m (previous year: EUR 122.9m). Profit/loss ­before in- cent to EUR 292.2m. This was largely due to foreign ments in China, the world’s largest airfreight market, items on the agenda. The C40 cost-cutting program- per cent, however, so the cargo load factor declined Capacity was reduced by 2.3 per cent in the Middle East/ come taxes came to EUR – 13.2m (down EUR 123.7m The cost of materials and services fell year on year by currency hedging losses. poses a particular risk. This forecast does not in- me has also been launched, and is expec- year on year by 3.4 percentage points. Africa traffic region, while cargo tonne-kilometres fell by compared with the previous year). 6.7 per cent to EUR 1,576.6m. clude the cost of any strikes at Lufthansa ted to deliver its first set of measures 5.3 per cent. The load factor shrank by 1.7 percentage Capital expenditure fell by EUR 97.7m to EUR 116.2m, Passenger Airlines and Lufthansa Cargo. this year. Capacity was expanded by 3.5 per cent in the Ameri- points. Lufthansa Cargo generated revenue of EUR 2,354.9m Staff costs were up on the previous year by 7.0 per cent which stemmed primarily from lower payments for the cas traffic region, but cargo tonne-kilometres fell by in the reporting period. Traffic revenue is a major part of to EUR 414.0m. The increase stems mainly from the ef- purchase of Boeing 777F aircraft. 2.9 per cent. The load factor shrank by 4.2 percentage Available tonne-kilometres in Europe rose by 0.4 per total revenue and fell by 3.8 per cent to EUR 2,289.6m. fects of currency and wage settlements, as well as hig- points. cent, but cargo tonne-kilometres fell by 4.4 per cent. Positive exchange rate effects were mainly outweighed her service costs for pension obligations. The Logistics The financial result improved by EUR 3.5m year on year The load factor shrank by 2.4 percentage points. by a decline in fuel surcharges. segment had an average of 4,643 employees in the re- to EUR 9.1m, primarily due to positive earnings contri- porting period, largely unchanged compared with the butions from subsidiaries accounted for using the equity Other capitalised internal expenses fell by EUR 2.8m to previous year (4,656 employees). method. EUR 3.3m compared with the previous year and related to internal project expenses which must be capitalised. Depreciation and amortisation was up by EUR 88.7m on the previous year, at EUR 152.5m. In addition to depre- Other operating income fell year on year by EUR 23.9m ciation on the new B777F aircraft, this amount also in- to EUR 54.8m. This was largely as a result of lower cludes impairment losses totalling EUR 71m on project exchange rate gains. costs in connection with the postponement of the new

Available Revenue Cargo 2015 2014 Changes Trends in Net traffic Freight/ freight tonne­ freight tonne-­ load Logistics expenses in EUR m in EUR m in % traffic regions revenue mail kilometres kilometres factor Cost of materials and services 1,576.6 1,690.2 – 6.7 in EUR m external revenue in Tsd. t in Mio. in Mio. in % – of which charter expenses 675.5 702.3 – 3.7

– of which fuel 319.2 453.4 – 29.6 2015 * % 2015 * % 2015 * % 2015 * % 2015 * %-P – of which fees and charges 302.5 277.8 9.0 Europe 198 – 6.2 531 – 4.7 687 0.4 328 – 4.4 47.7 – 2.4 – of which MRO 125.7 121.1 4.1 Americas 957 – 0.9 503 – 1.7 5,766 3.5 3,679 – 2.9 63.8 – 4.2 Staff costs 414.0 387.3 7.0 Asia/Pacific 919 – 5.1 466 – 0.3 4,996 1.6 3,739 – 2.3 74.8 – 3.0 Depreciation, amortisation and impairment 152.5 63.8 139.1 Middle East/ Africa 200 – 8.3 130 – 2.6 1,157 – 2.3 618 – 5.3 53.4 – 1.7 Other operating expenses 292.2 273.9 6.6

Total 2,275 – 3.8 1,630 – 2.4 12,606 2.0 8,364 – 2.9 66.3 – 3.4 Total operating expenses 2,435.3 2,415.2 0.8

* Change in There may be differences due to rounding.

Traffic volumes. Balance sheet. Income statement. Freight/mail tonnage in thousand tonnes 2015

32.5 % 30.9 % Lufthansa Cargo AG subgroup as of 31 December 2015 (under IFRS)*. Logistics subgroup between 1 January and 31 December 2015 (under IFRS)*. Europe (531) Americas (503)

2015 2014 2015 2014 2015 2014 ASSETS in EUR m in EUR m SHAREHOLDERS‘ EQUITY AND LIABILITIES in EUR m in EUR m in EUR m in EUR m

Total revenue 2,354.9 2,435.3 Other intangible assets 81.9 66.9 Issued capital 664.5 100.0 Other internally produced and capitalised assets 3.3 6.1 Property, plant and other equipment 807.3 860.1 Reserves 113.7 14.2 Other operating income 54.8 78.7 8.0 % 28.6 % – of which aircraft 729.0 726.8 Net profit/loss for the period 78.0 63.1 Total income 2,413.0 2,520.1 Africa/Middle East (130) Asia/Pacific (466) Financial investments 61.0 55.1 Shareholders’ equity 856.2 177.3

Receivables and other assets 81.4 97.0 Cost of materials and services 1,576.6 1,690.2

Non-current assets 1,031.6 1,079.1 Provisions for pensions and similar obligations 217.8 281.5 Staff costs 414.0 387.3 Development of operating expenses. Other provisions 67.5 57.7 Depreciation, amortisation and impairment 152.5 63.8 2015 in EUR m

Inventories 1.5 1.4 Financial liabilities 3.9 3.9 Other operating expenses 292.2 273.9 319 153

Receivables and other assets 527.7 373.4 Other liabilities 79.3 572.6 Total expenses 2,435.3 2,415.2 Fuel Depreciation

Cash and cash equivalents 7.1 11.1 Advance payments and PRAP 0.0 0.2 303 Result from operating activities – 2 2 . 3 104.9 Fees Current assets 536.3 385.9 Deferred income tax liabilities 4.4 1.6

Non-current provisions and liabilities 372.9 917.5 Financial result 9.1 5.6

Total assets 1,567.9 1,465.0 Other provisions 35.7 46.1 Profit/loss before income taxes – 1 3 . 2 110.5

* The financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS). Trade payables and other liabilities 299.5 318.8 Income taxes – 11.1 23.9 For reasons of simplification, IAS 39 has not been applied to its full extent. 414 676 There may be differences due to rounding. Advance payments and PRAP 1.8 3.9 Profit/loss after income taxes – 2 .1 86.6 Staff Charter Effective income tax obligations 1.8 1.4

Current provisions and liabilities 338.8 370.2 * The financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS). For reasons of simplification, IAS 39 has not been applied to its full extent. There may be differences due to rounding. Traffic revenue. Total shareholders’ equity and liabilities 1,567.9 1,465.0 in EUR bn.

2.29 2.38

2015 2014